All things being equal, Commission on Transaction (COT) will be phased-out in Nigeria by 2016. In the Revised Guide to Bank Charges issued by the Central Bank of Nigeria (CBN) this week [see here] and which will become effective on April 1, 2013, some far-reaching provisions have been made regarding COT (that is, the fee charged by a bank for facilitating a customer’s withdrawal of funds from his account with the bank). The highpoints of the Revised Guide to Bank Charges in respect of COT are as follows:
- COT is applicable to customer-induced debit transactions on current accounts.
- COT is not chargeable on returned outward clearing cheques, reversal of transactions and all bank-induced debits.
- COT rate is still negotiable, but subject to a maximum of N3 per mille 2013; N2 per mille in 2014; N1 per mille in 2015; and nil COT from 2016. In other words, Commission on Transaction (COT) is to be phased-out in 2016.
- Loan repayment from current or savings accounts is to be COT-free.
- Debits representing transfer to other accounts in the same name, in the same branch or at another branch of the same bank, attracts nil COT.